Generally speaking, you should save as much as possible for retirement, especially if you start later in life. If you can comfortably save the maximum amount each year, you should. However, most people are not in the position to save tens of thousands of dollars annually.
If you are in your 20s or 30s, you may have just started feeling financially comfortable. A good starting point is 10 to 15 percent of your pretax income. The 50/30/20 budgeting rule states to spend:
• 50 percent of your income is needed. Needs are things that you literally cannot live without or cannot live easily without, such as housing, groceries, utilities, health insurance, and car payments.
• 30 percent of wants. Wants are what you like but not what you need to survive, such as shopping, dining out, vacations, hobbies, and streaming services.
• 20 percent on savings. Savings is actual storing of money, like an emergency fund and retirement account. It also includes debt payments, like student loans and credit card debt.
Look at your spending habits and see if your expenses follow this guideline. For example, are you spending more on wants?
Once you figure out how much of your income should/can go towards retirement, set up automatic payments. Your employer can automatically deduct your 401(k) contributions from your check, or you can set up autopay from your financial institution to your IRA.
But how much are you saving? Your current age, existing savings, and retirement age will influence how much you need to save for your retirement.